The value of global financial wealth shrank for the first time in 15 years in 2022, falling 4% to $255 trillion.
The drivers include rising inflation, the resulting rise in interest rates, and stock market weakness on the back of geopolitical uncertainty triggered by the war in Ukraine.
However, the decline is expected to be short-lived, with a rebound of 5% to $267 trillion in 2023.
These are among the findings of BCG’s 2023 Global Wealth Report: Resetting the Cycle, the Boston Consulting Group’s 23rd annual global wealth report, released today.
The value of real estate assets also rose by 5.5% to $261 trillion.
Overall, this brought total absolute global wealth to $516 trillion in 2022, an increase of 1% compared to 2021.
Financial wealth continued to grow in Asia Pacific, the Middle East, Africa and Latin America in 2022, but declined in North America and Europe.
In addition, cross-border wealth increased by 4.8% in 2022 to reach $12 trillion globally.
Against this backdrop, the year witnessed a shift in the dynamics of the booking centre, as follows:
Switzerland remains a very attractive financial and administrative centre, but Hong Kong is expected to overtake it as the world’s largest booking center by the end of 2025.
Hong Kong has had the highest growth in assets under management among the top booking centers over the past five years, at a compound annual growth rate of 13%, and it faces strong competition from Singapore, which has become a safe haven for the Asia Pacific region..
Finally, the UAE has attracted assets from various regions, including Asia Pacific and Eastern Europe, resulting in asset management growth faster than any other booking centre. Its financial wealth is expected to continue to grow over the next five years at a rate of 10%.
